Noida plans forensic audit of all defaulting builder projects

NOIDA: The Noida Authority has written to the Uttar Pradesh government for a forensic audit on the fund flow of all the defaulting builders with projects in Noida. The move follows reports of National Company Law Tribunal (NCLT) having admitted pleas of insolvency proceedings by several banks who wanted to recover their dues from the builders.

A forensic audit is an examination and evaluation of a firm's or individual's financial information for use as evidence in court. It is conducted in order to prosecute a party for fraud, embezzlement or other financial claims.

After the enactment of the Insolvency and Bankruptcy Code, NCLT was tasked with overseeing insolvency proceedings against companies that default in loan repayment to banks and are unable to settle their dues on account of financial stress. The law allows for either revival of the company, by the existing or a new set of owners, or liquidation to clear the dues, as far as possible

According to Amit Mohan Prasad, chief executive officer, Noida Authority, a high-level meeting has also been scheduled on August 14 in Lucknow with senior officials in the state government to decide on the next step in the matter. “We have ongoing projects of nearly 36 builders in our area,” said Prasad. “Currently, we are looking at an outstanding amount of nearly Rs 10,000 crore owed to us by the realtors,” he said. “Amrapali group is a big defaulter and owes us nearly Rs 1,200 crore. We have asked the state government to focus on the developers as thousands of homebuyers are waiting for possession of homes,” he said. “Jaypee Infratech is another defaulter with thousands of promised residential units yet to be delivered, though they have paid the Yamuna Authority Rs 400 crore recently,” he said.

Getamber Anand, CREDAI national president, who is also CMD, ATS Infrastructure Ltd, on being quizzed about the CEO's move on proposed forensic audit said: “Noida Authority should play the role of a monitoring agency rather than one of police. The need of the hour is for hand-holding of builders with held-up projects. The Authority needs to work together with the builders rather than against each other and help the builders in delivering flats to homebuyers. If the authority supports the builders, we can address the prevailing issues together and deliver flats to buyers.”

“I have also called for a meeting with 36 builders on August 16 and 18,” Prasad said.

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